Tag Archives: Fiscal Policy

Fiscal Policy in a Changing World

From Larry Summers: I invite you to consider how the prodigious change associated with information technology that may be qualitatively different from past technological change may have defining implications for our economy going forward. If I have caused you to … Continue reading

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The battle over the US budget is the wrong fight

From Larry Summers: This month Washington is consumed by the impasse over reopening the government and raising the debt limit. It seems likely that this episode, like the 1995-96 government shutdowns and the 2011 debt limit scare, will be remembered mainly … Continue reading

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The Time for Austerity: Estimating the Average Treatment Effect of Fiscal Policy

From Oscar Jorda and Alan Taylor: Elevated government debt levels in advanced economies have risen rapidly as sovereigns absorbed private-sector losses and cyclical deficits blew up in the Global Financial Crisis and subsequent slump. A rush to fiscal austerity followed but its justifications and impacts … Continue reading

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Is Forgiving Student Loans the Worst Idea Ever?

The third pillar of President Obama’s new college affordability plan is “ensuring that student debt remains affordable.” Here’s a bit more detail: The President has proposed allowing all student borrowers to cap their federal student loan payments at 10 percent of … Continue reading

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On Keeping Your Powder Dry: Fiscal Foundations of Financial and Price Stability

From Maury Obstfeld: Banking systems have rapidly grown to a point where for many countries bank assets amount to multiples of GDP. As a consequence, government’s capacity to provide stability-enhancing fiscal guarantees against systemic crises can no longer be taken for … Continue reading

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Larry Summers on “The Fiscal and Economic Effects of Austerity”

From Larry Summers: Thank you for the opportunity to speak before this committee. You have chosen to address issues relating to austerity at an opportune time as both our economic and our budget situations are in considerable flux and as … Continue reading

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Lessons on Fiscal Policy Since the Recession by Laura Tyson

This column by Laura Tyson is worth reading: In late 2008, the United States economy was caught in the midst of what proved to be its longest and deepest recession since the end of World War II. Frightened by steep … Continue reading

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The Risks of Debt by Brad Delong

Here’s a column worth reading from Brad Delong: A country that spends and spends and spends and does not tax sufficiently will eventually run into debt-generated trouble. Its nominal interest rates will rise as bondholders fear inflation. Its business leaders … Continue reading

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The Role of Automatic Stabilizers in the U.S. Business Cycle

Alisdair McKay and Ricardo Reis have a new paper on automatic stabilizers with some interesting results on heterogeneous effects for different income groups. ABSTRACT: Most countries have automatic rules in their tax-and-transfer systems that are partly intended to stabilize economic … Continue reading

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Fiscal Policy as Stabilization Policy: What do we think now that we did not think in 2007?

Here’s a presentation that Brad Delong and Laura Tyson are giving at the IMF’s Fiscal Forum today. I helped put them put it together and make some of these graphs. Well worth checking out.

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